India’s budget carrier SpiceJet Ltd said on Thursday it made a loss of Rs 2.75 billion ($44.2 million) in the last three months of 2014, after the airline was forced to cut the size of its fleet and cancel contracts to stay afloat.
Spicejet was on the verge of collapsing in December after running out of cash to pay its creditors, before co-founder Ajay Singh stepped in with a rescue package to keep the airline flying.
The new owners are expected to recapitalise SpiceJet once regulators have approved the bailout deal.
To stave of collapse during the quarter, SpiceJet had to cut its operating capacity by 31 percent from a year earlier, the carrier said in a statement.
Without the one-off charges and exceptional costs, the company would have made a net profit of 200 million rupees, SpiceJet said.
The carrier reported a net loss of 1.72 billion rupees during the same period last year.
SpiceJet said it had provisioned for costs related to the early terminations of contracts.
“With imminent recapitalization, our focus going forward will be on re-negotiating contracts and settling outstandings, which are together expected to bring down costs considerably,” said Chief Financial Officer Kiran Koteshwar.
A big drop in oil prices in the last six months is expected to help Indian airlines return to profitability after two years of losses, although analysts caution that cut-throat competition for fares will limit a recovery.
($1 = 62.2578 Indian rupees)